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LONDON (Reuters) - Intercontinental Exchange has been provisionally selected as the new operator of the London Bullion Market Association silver benchmark, three precious metals market sources said.
A formal decision on the LBMA Silver Price has yet to be made, but is expected within days once final conditions have been settled.
"It's definitely ICE," one source said.
The LBMA and ICE declined to comment.
A race to provide the auction process that sets the benchmark, for which the LBMA owns the intellectual property rights, narrowed to two potential providers, ICE and the London Metal Exchange, earlier this year.
ICE is the current operator of the LBMA Gold Price benchmark, which is set via an electronic auction process. The exchange introduced clearing of business transacted during the auction in April.
"They were the favourite of the two because they were ready to go," one precious metals market participant said.
The LBMA said in March that the current incumbents, CME Group and Thomson Reuters, were stepping down from providing the auction process less than three years after they successfully bid to provide it.
The benchmark is used by silver producers and consumers globally to price contracts.
Its previous incarnation, the 117-year-old London silver "fix", ended in 2014 after its operators said they would stop running the telephone-based auction.
The new electronic benchmark has been plagued in the past by big swings away from the underlying spot price, which traders have attributed a lack of liquidity and an unwillingness on the part of the banks taking part in the auction to adjust orders once the process has started.
Additional reporting by Pratima Desai; editing by Veronica Brown and Jason Neely